Despite the widespread use of vehicle number plate recognition cameras, which can help the police detect road tax evaders, the number of motorists failing to the pay Vehicle Excise Duty (VED) is rising.
The evasion rate jumped to 5% in 2006-07, up from 3.6% during the previous 12 months.
This equates to some £214 million in lost tax revenue.
The Driver and Vehicle Licensing Authority (DVLA), which is tasked with tackling road tax evasion, has now accepted that it will not achieve its targets of reducing evasion to 2.5% thus saving £70 million a year by the end of 2007–08.
“Motorists and motorcyclists who refuse to pay road tax are stealing from law-abiding taxpayers and unlicensed cars are often associated with other forms of crime,” said Edward Leigh MP, chairman of the House of Commons Public Accounts Committee, which published the figures after investigating the VED system.
“And yet the Department for Transport and the DVLA are losing ground in their fight against VED evasion.”
Motorcyclists are particularly liable to evade road tax. Nearly 40% of motorcycles are now unlicensed.
“If the DVLA’s motorcycle enforcement regime is not to be a complete laughing stock, then the Agency and the Department for Transport (DfT) oversees the must make the most of new powers to enforce VED – and strongly consider more severe measures such as impounding unlicensed motorcycles.
"Large parts of the biking community are cocking a snook at the law."
A well known loophole exists, which appears to be being abused by a growing number of motorists.
The National Audit Office discovered that motorists who delay renewing their VED by a month could avoid paying for one month’s worth of road tax without risk of being sent a penalty notice.
However, some motorists are going further and not licensing their vehicle or registering its keeper, which reflects the intention of its owner to avoid congestion charges and prevent identification, as well as evasion of payment of VED, said the Public Accounts Committee report.
"VED evasion isn't just about money - motorists driving without tax are also more likely to be driving uninsured and without an MOT certificate,” said Sheila Rainger, acting director of the RAC Foundation.
“Responsible motorists are not only picking up the tab for evaders, they are also being put at risk by them.
"The Government needs to boost the number of traffic police carrying out on-road crackdowns, so that the motoring underclass and the hard-core tax-dodgers are the ones feeling the pressure, not the law-abiding motorist."
The Committee said that the answer to the problem is for the DVLA to work with closer with organisations such as the police and local authorities to tackle persistent evaders.
“In the medium term the Department and the DVLA may need to move to increasingly advanced technological solutions to VED evasion,” said the committee’s report.